METRO Receives Refund From Spanish Rail Car Vendor

February 16, 2011

METRO has received a $14 million dollar refund from CAF, the Spanish rail car vendor.

Last December, the agency reached a settlement with CAF USA, Inc. (a subsidiary of the Spanish firm Construcciones y Auxiliar de Ferrocarriles, S.A.) over two disputed contracts for construction of light-rail vehicles for METRO’s North and Southeast lines.

“I want to thank CAF for the professional way in which they handled this process,” said METRO Chairman Gilbert Garcia. “These funds will help carry out the NEW METRO’s goals of delivering first-class transit services to our deserving customers. This is $14 million we can put toward our rail cars.

Under that agreement, the contracts were canceled and CAF relinquished claim to any additional payments for unpaid work and lost profits – this, in addition to the $14 million refund.

The Federal Transportation Administration (FTA) ruled last September that CAF and previous METRO management violated federal procurement law and Buy America requirements for the purchase of the rail cars. In order to move forward to secure the $900 million Full Funding Grant Agreement, the FTA said METRO must rebid the contract and follow its procurement process, including full compliance with the Buy America requirements.

NEW METRO management acted quickly, restructuring the agency’s procurement process, which is currently under FTA review.

“This underscores the progress made by the NEW METRO” said METRO’s President & CEO George Greanias. “From the beginning our focus has been, and will be, to create a stronger foundation for the agency based on clear goals, measurable objectives and transparency. We’re raising the bar.”